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US Must Amend Internet Gambling Rules By 2006 Under WTO Ruling

by Leroy Baker, Tax-News.com, New York

23 August 2005

The United States has been given until April 2006 to comply with a World Trade Organisation ruling in the long-running dispute with Antigua and Barbuda concerning access to the US internet gambling market.

The tiny Caribbean jurisdiction had argued that by seeking to legally prevent US citizens from accessing online gambling services such as those offered by many companies in Antigua and Barbuda, the government of the United States was unfairly putting a dampener on the country’s economy.

US federal laws were said to bar the placing of bets across state lines by electronic means, preventing Antiguan online gambling companies from accessing US customers.

The WTO Appellate Body ruling in April found largely in favour of Antigua and Barbuda's complaint over US prohibitions which prevented US banks and major internet search engines from doing business with gambling firms on the island, although both sides initially claimed victory based on the complex and somewhat confusing statement by the WTO.

The 127-page WTO decision, which partially reversed an earlier decision on the matter, concluded that:

“The Appellate Body recommends that the Dispute Settlement Body request the United States to bring its measures, found in this Report and in the Panel Report as modified by this Report to be inconsistent with the General Agreement on Trade in Services, into conformity with its obligations under that agreement.”

In a statement released on Friday, the WTO set a "reasonable time period" for the US to amend its legislation in line with the ruling, which must be complete by April next year.

In turn, a spokeswoman for the US Trade Representative has announced that while the US intends to comply with the ruling, it will not weaken current restrictions on US gambling.

"In order to implement the findings, all we need to do is clarify one narrow issue concerning Internet gambling on horse racing," said the spokeswoman.

"This does not involve weakening US restrictions on Internet gambling," she added.

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